**Exhibit 10.1**

** **

**TENTHAMENDMENT**

 

**THIS TENTH AMENDMENT** (the “Amendment”) is made and entered into as of the             day of                      ,2003, by and between **EOP-110 ATRIUM PLACE, L.L.C., a Delaware limited liability company**(“Landlord”), and **CLICK2LEARN, INC., a Delawarecorporation**(“Tenant”).

 

 

## **RECITALS**

 

A.**                                  **Landlord (as successor in interest to Dean WitterRealty Income Partnership II, L.P., a Delaware limited partnership) and Tenant(as successor in interest to Asymetrix Corporation, a Washington corporation)are parties to that certain lease dated May 24, 1991 (the “Original Lease”),which lease has been previously amended by instruments dated April 16, 1992(the “First Amendment”), May 20, 1992 (the “Second Amendment”), September 29,1992 (the “Third Amendment”), August 27, 1993 (the “Fourth Amendment”), April29, 1995 (the “Fifth Amendment”), January 26, 1996 (the “Sixth Amendment”),March 31, 1996 (the “Seventh Amendment’), August 15, 1998 (the “ConditionalPartial Lease Termination Agreement”), October 16, 1998 (the “EighthAmendment”), and April 16, 2002 (the “Ninth Amendment”) (collectively, the“Lease”).  Pursuant to the Lease,Landlord has leased to Tenant space currently containing approximately 36,649rentable square feet (the “Premises”) on the 6th and 7th floors of the buildingcommonly known as Atrium Place located at 110-110th Avenue N.E., Bellevue,Washington (the “Building”).

 

B.                                     Landlord has remeasured the Premises and theBuilding using the current ANSI\BOMA Z 65.1-1996 standard and as a result ofsuch remeasurement, during the Second Extended Term (as hereinafter defined),the Premises shall consist of 39,363 rentable square feet and the Buildingshall consist of 224,285 rentable square feet.

 

C.**                                    **The Lease by its terms shall expire onOctober 31, 2003 (“Prior Extended Termination Date”), and the partiesdesire to extend the Lease Term, provide for Landlord Work (as hereinafterdefined) and make certain other changes to the Lease, all on the followingterms and conditions.

 

**NOW, THEREFORE,** in consideration of the mutual covenants andagreements herein contained and other good and valuable consideration, thereceipt and sufficiency of which are hereby acknowledged, Landlord and Tenantagree as follows:

 

I.**                                         Premises.**

 

A.                                   **Remeasurement.**  Effective (retroactively) as of January 1, 2003, the net rentable square feet ofthe Premises shall be amended from “36,649 square feet” to “39,363 squarefeet”, consisting of approximately 3,863 rentable square feet for Suites 680and 690 and approximately 35,500 rentable square feet for Suite 700, and thenet rentable square feet of the building shall be amended from “213,000 squarefeet” to “224,285 square feet”. Landlord and Tenant acknowledge that such increase is a result of aremeasurement of the Premises and the Building and not the result of anexpansion or addition of space.  TheRent and all other charges under the Lease shall remain payable as providedtherein with respect to the Premises up to and including December 31,2002.

 

B.                                     **Temporary Premises.**  If: (1) the Landlord Work (asdefined in **Exhibit B** attached hereto) is or will be materiallydisruptive to the conduct of Tenant’s business in the Premises, and (2) Tenanthas delivered the final approved Plans (as defined in **Exhibit B** attachedhereto) to Landlord on or before March 15, 2003, and has otherwisecomplied with **Exhibit B** attached hereto in all material respects, thenTenant shall be permitted to occupy space selected by Landlord (in Landlord’sreasonable discretion) on the 2nd, 4th or 6thfloors of the Building (the “Temporary Premises”).  At any time after Tenant has delivered the final approved Plansand subject to the conditions in the previous sentence, Tenant may notifyLandlord of its need for the Temporary Premises.  Within 5 Business Days of such notice, Landlord shalladvise Tenant (the “Temporary Premises Advice”) of the temporary space Landlordis prepared to permit Tenant to occupy as the Temporary Premises, and Landlordshall make reasonable efforts to provide such space on the 6th floorof the Building.  Tenant may occupy theTemporary

 

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Premises by providing Landlord with written notice within 5 days afterthe date of the Temporary Premises Advice. The term for the Temporary Premises shall commence upon the commencementdate stated in the Temporary Premises Advice and end on the date Landlord substantially completes (as determined byLandlord in Landlord’s reasonable discretion) Landlord’s Work (the “TemporaryPremises Term”).  Tenant shall acceptthe Temporary Premises in its “as is” condition, and Landlord shall have noobligation to provide any improvement allowance, leasehold improvements, orother work to the Temporary Premises. During the Temporary Premises Term, Tenant shall occupy the TemporaryPremises under all terms and provisions of the Lease (including, but notlimited to, the indemnity and insurance provisions thereunder), except thoseprovisions requiring payment of Base Rent or Additional Rent as to theTemporary Premises.  During theTemporary Premises Term, Landlord shall have the right to relocate Tenant fromthe Temporary Premises to another space substantially similar to the TemporaryPremises (the “Relocation Temporary Premises”) at Landlord’s sole cost andexpense.  After such relocation, theRelocation Temporary Premises shall be considered the “Temporary Premises” forthe purposes of this Section I.B. During the Temporary Premises Term, Tenant shall continue to pay BaseRent and Additional Rent for the Premises pursuant to the terms of the Leaseand this Amendment.

 

II.                                     **Extension.**  The Lease Term is hereby extended for aperiod of 61 months and shall expire on December 31, 2008 (“SecondExtended Termination Date”), unless sooner terminated in accordance with theterms of the Lease.  That portion of theLease Term commencing the day immediately following the Prior Termination Date(“Second Extension Date”) and ending on the Second Extended Termination Date shallbe referred to herein as the “Second Extended Term”.

 

III.**                                 Base Rent.**  Retroactively as ofJanuary 1, 2003, the schedule of Base Rent payable with respect to thePremises during the remaining portion of the Lease Term and the Second ExtendedTerm is the following:

 
| **Period**                |   | **Annual  Rate  Per Square  Foot** |   | **Annual  Base Rent** |   | **Monthly  Base Rent** |   |
|---------------------------|--------|------------------------------------|--------|-----------------------|--------|------------------------|--------|
| 01/01/03 – 10/31/03* |   | $                                  | 20.25  |                  | $      | 797,100.72             |   | $ | 66,425.06 |   |
| 11/01/03 – 12/31/05  |   | $                                  | 20.25  |                  | $      | 797,100.72             |   | $ | 66,425.06 |   |
| 01/01/06 – 12/31/08  |   | $                                  | 22.50  |                  | $      | 885,667.56             |   | $ | 73,805.63 |   |

 

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*covers months50-60 of the current Lease Term and supercedes the schedule set forth inSection 7(a) of the Eighth Amendment

 

All such Base Rentshall be payable by Tenant in accordance with the terms of the Lease.

 

Notwithstandingthe Base Rent schedules set forth above, as long as Tenant is not in default,Tenant shall be entitled to an abatement of Base Rent for: (a) the periodcommencing January 1, 2003, and ending January 31, 2003 (the “FirstRent Abatement Period”), and (b) the period commencing January 1, 2004,and ending January 31, 2004 (the “Second Rent Abatement Period”, andcollectively with the First Rent Abatement Period, the “Rent AbatementPeriod”).  The total amount of Base Rentabated during the Rent Abatement Period shall equal One Hundred Thirty-twoEight Hundred Fifty and 12/100 Dollars ($132,850.12) (the “Abated BaseRent”).  During the Rent AbatementPeriod, all other costs and charges specified in the Lease shall remain as dueand payable pursuant to the provisions of the Lease.  In the event Tenant defaults in any monetary obligations underthe Lease at any time during the remaining portion of the current Lease Term orthe Second Extended Term, and as a result of such default Landlord obtains ajudgment against Tenant in an amount greater than the total of the Abated BaseRent and the amount of any rent credits applied to Base Rent pursuant toparagraph 7 of the Work Letter attached hereto as **Exhibit B**, then Landlordmay add the amount of all such Abated Base Rent and rent credits to suchjudgment.  The addition of the AbatedBase Rent and rent credits in the event of Landlord obtains a judgment againstTenant shall not limit or affect any of Landlord’s other rights, pursuant tothis Lease or at law or in equity.

 

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IV.**                                 Security Deposit.**

 

A.                                   **Generally.**  Within 10 Business Days after execution ofthis Amendment by Tenant, Tenant shall pay Landlord the sum of $73,805.63 as asecurity deposit (the “Security Deposit”). Landlord shall hold the Security Deposit without liability for interest(unless required by law) as security for the performance of Tenant’sobligations.  The Security Deposit isnot an advance payment of Rent or a measure of Tenant’s liability for damages.  Landlord may, from time to time, withoutprejudice to any other remedy, use all or a portion of the Security Deposit tosatisfy past due (i.e., beyond the applicable notice and cure period) Rent orto cure any uncured default by Tenant. If Landlord uses the Security Deposit, Tenant shall on demand restorethe Security Deposit to its original amount. Landlord shall return anyunapplied portion of the Security Deposit to Tenant within 45 days after thelater to occur of: (1) the date Tenant surrenders possession of thePremises to Landlord in accordance with this Lease; or (2) the terminationdate of the Lease Term.  If Landlordtransfers its interest in the Premises, Landlord may assign the SecurityDeposit to the transferee and, following the assignment, Landlord shall have nofurther liability for the return of the Security Deposit.  Landlord shall not be required to keep theSecurity Deposit separate from its other accounts.

 

B.                                     **Letter of Credit.**  The Security Deposit may be in the form ofan irrevocable letter of credit (the “Letter of Credit”), which Letter ofCredit shall:  (a) be in the amount of $73,805.63; (b) be issued on the form attached hereto as **Exhibit A**;(c) name Landlord as its beneficiary; and (d) be drawn on an FDIC insuredfinancial institution satisfactory to the Landlord.  The Letter of Credit (and any renewals or replacements thereof)shall be for a term of not less than 1 year. Tenant agrees that it shall from time to time, as necessary, whether asa result of a draw on the Letter of Credit by Landlord pursuant to the terms hereofor as a result of the expiration of the Letter of Credit then in effect, renewor replace the original and any subsequent Letter of Credit so that a Letter ofCredit, in the amount required hereunder, is in effect until a date which is atleast 60 days after the Second Extended Termination Date of the Lease.  If Tenant fails to furnish such renewal orreplacement at least 60 days prior to the stated expiration date of the Letterof Credit then held by Landlord, Landlord may draw upon such Letter of Creditand hold the proceeds thereof (and such proceeds need not be segregated) as aSecurity Deposit pursuant to the terms of Section IV.A. above.  Any renewal or replacement of the originalor any subsequent Letter of Credit shall meet the requirements for the originalLetter of Credit as set forth above, except that such replacement or renewalshall be issued by a national bank satisfactory to Landlord at the time of theissuance thereof.

 

If Landlord draws on the Letterof Credit as permitted in this Amendment or the Letter of Credit, then, upondemand of Landlord, Tenant shall restore the amount available under the Letterof Credit to its original amount by providing Landlord with an amendment to theLetter of Credit evidencing that the amount available under the Letter ofCredit has been restored to its original amount.  In the alternative, Tenant may provide Landlord with cash, to beheld by Landlord in accordance with Section IV.A. above, equal to therestoration amount required under the Letter of Credit.

 

V.**                                     Operating Costs.**  For theperiod commencing (retroactively) on January 1, 2003, and ending on theSecond Extended Termination Date, Tenant shall pay for Operating CostsAllocable to the Premises in accordance with the terms of the Lease, provided, however,during such period, the Base Year for the computation of Operating CostsAllocable to the Premises is 2003, andTenant’s Allocable Share with respect to the Premises is 17.5504% (i.e., 39,363RSF/224,285 RSF).

 

VI.**                                 Improvements to Premises.**

 

A.                                   **Condition of Premises**.  Tenant is in possession ofthe Premises and accepts the same “as is” without any agreements,representations, understandings or obligations on the part of Landlord toperform any alterations, repairs or

 

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improvements, except as may be expressly providedotherwise in this Amendment or Paragraph 4 of the Original Lease.

 

B.                                     **Responsibility for Improvements to Premises.**  Landlordshall undertake, perform and complete the improvements to the Premisesdescribed in and in accordance with the Work Letter attached hereto as **Exhibit B**.  All repairs and improvements undertaken byor under the direction of Landlord, including all Landlord Work, shall be donein a good and workmanlike manner.

 

VII.**                             Other Pertinent Provisions.**  Landlordand Tenant agree that, effective as of the date of this Amendment (unlessdifferent effective date(s) is/are specifically referenced in this Section),the Lease shall be amended in the following additional respects:

 

A.                                   **Parking.**  Effective as of January 1, 2003, Paragraph 3 of Attachment I to theOriginal Lease (as modified by the Fourth Amendment and the Sixth Amendment)and Section 11 of the Eighth Amendment are hereby deleted and replaced with **Exhibit C**attached hereto and made a part hereof.

 

B.                                     **BuildingSquare Footage.**  Effective asof January 1, 2003, therentable square footage of the Building is deemed to be 224,285 square feet.

 

C.                                     **RenewalOption.**  Section 8 of theSeventh Amendment, Renewal Option, is hereby deleted and replaced with thefollowing:

 

1.                                       Grantof Option; Conditions.  Tenant shallhave the right to extend the Term beyond the Second Extended Termination Date(the “Renewal Option”) for one additional period of 5 years commencing on theday following the Second Extended Termination Date and ending on the 5thanniversary of the Second Extended Termination Date (the “Renewal Term”), if:

 

a.                                       Landlordreceives notice of exercise (“Initial Renewal Notice”) not less than 12 fullcalendar months prior to the expiration of the Second Extended Term and notmore than 15 full calendar months prior to the expiration of the SecondExtended Term; and

 

b.                                      Tenantis not in default in any monetary obligations under the Lease beyond anyapplicable cure periods at the time that Tenant delivers its Initial RenewalNotice or at the time Tenant delivers its Binding Notice (as defined below);and

 

c.                                       Nomore than 15% of the Premises is sublet (other than to an Affiliate, as definedin the Original Lease) at the time that Tenant delivers its Initial RenewalNotice or at the time Tenant delivers its Binding Notice; and

 

d.                                      TheLease has not been assigned (other than to an Affiliate, as defined in theOriginal Lease) prior to the date that Tenant delivers its Initial Renewal Noticeor prior to the date Tenant delivers its Binding Notice.

 

2.                                       TermsApplicable to Premises During Renewal Term.

 

a.                                       Theinitial Base Rent rate per rentable square foot for the Premises during theRenewal Term shall equal the Prevailing Market (hereinafter defined) rate perrentable square foot for the Premises.  Base Rent during the Renewal Term shall increase,if at all, in accordance with the increases assumed in the determination ofPrevailing Market rate.  Base Rentattributable to the Premises shall be payable in monthly installments inaccordance with the terms and conditions of Paragraph 3 of the Lease.

 

b.                                      Tenantshall pay Additional Rent (i.e. Operating Costs) for the Premises during theRenewal Term in accordance with

 

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Paragraph 9 of the Lease, and the manner and method in whichTenant reimburses Landlord for Tenant’s Allocable Share of Operating Costs andthe Base Year, if any, applicable to such matter, shall be some of the factorsconsidered in determining the Prevailing Market rate for the Renewal Term.

 

3.                                       Procedurefor Determining Prevailing Market. Within 30 days after receipt of Tenant’s Initial Renewal Notice,Landlord shall notify Tenant in writing of the applicable Base Rent rate for thePremises for the Renewal Term (“Landlord’s Notice”).  Tenant, within 30 days after the date on which Tenant receivesLandlord’s Notice, shall either (i) give Landlord final binding writtennotice (“Binding Notice”) of Tenant’s exercise of its Renewal Option, or(ii) if Tenant disagrees with Landlord’s determination, provide Landlordwith written notice of rejection (the “Rejection Notice”).  If Tenant fails to provide Landlord witheither a Binding Notice or Rejection Notice within such 30 day period, Tenant’sRenewal Option shall be null and void and of no further force and effect.  If Tenant provides Landlord with a BindingNotice, Landlord and Tenant shall enter into the Renewal Amendment (as definedbelow) upon the terms and conditions set forth herein.  If Tenant provides Landlord with a RejectionNotice, Landlord and Tenant shall work together in good faith to agree upon thePrevailing Market rate for the Premises during the Renewal Term.  Upon agreement, Tenant shall provideLandlord with Binding Notice and Landlord and Tenant shall enter into theRenewal Amendment in accordance with the terms and conditions hereof.  Notwithstanding the foregoing, if Landlordand Tenant are unable to agree upon the Prevailing Market rate for the Premiseswithin 30 days after the date on which Tenant provides Landlord with aRejection Notice, Tenant, by written notice to Landlord (the “ArbitrationNotice”) within 5 days after the expiration of such 30 day period, shall havethe right to have the Prevailing Market rate determined in accordance with thearbitration procedures described in Section D below.  If Landlord and Tenant fail to agree uponthe Prevailing Market rate within the 30 day period described and Tenant failsto timely exercise its right to arbitrate, Tenant’s Renewal Option shall bedeemed to be null and void and of no further force and effect.

 

4.                                       ArbitrationProcedure.

 

1.                                       IfTenant provides Landlord with an Arbitration Notice, Landlord and Tenant,within 10 Business Days after the date of the Arbitration Notice, shall eachsimultaneously submit to the other, in a sealed envelope, its good faithestimate of the Prevailing Market rate for the Premises during the Renewal Term(collectively referred to as the “Estimates”). If the higher of such Estimates is not more than 105% of the lower ofsuch Estimates, then Prevailing Market rate shall be the average of the twoEstimates.  If the Prevailing Marketrate is not resolved by the exchange of Estimates, then, within 7 days afterthe exchange of Estimates, Landlord and Tenant shall each select an appraiserto determine which of the two Estimates most closely reflects the PrevailingMarket rate for the Premises during the Renewal Term.  Each appraiser so selected shall be certified as an MAI appraiseror as an ASA appraiser and shall have had at least 5 years experience withinthe previous 10 years as a real estate appraiser working in Bellevue,Washington, with working knowledge of current rental rates and practices.  For purposes hereof, an “MAI” appraiser meansan individual who holds an MAI designation conferred by, and is an independentmember of, the American Institute of Real Estate Appraisers (or its successororganization, or in the event there is no successor organization, theorganization and designation most similar), and an “ASA” appraiser means anindividual who holds the Senior Member designation conferred by, and is anindependent member of, the American Society of Appraisers (or its successororganization, or, in the event there is no successor organization, theorganization and designation most

 

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similar).

 

2.                                       Uponselection, Landlord’s and Tenant’s appraisers shall work together in good faithto agree upon which of the two Estimates most closely reflects the PrevailingMarket rate for the Premises.  TheEstimate chosen by such appraisers shall be binding on both Landlord and Tenantas the Base Rent rate for the Premises during the Renewal Term.  If either Landlord or Tenant fails toappoint an appraiser within the 7 day period referred to above, the appraiserappointed by the other party shall be the sole appraiser for the purposeshereof.  If the two appraisers cannotagree upon which of the two Estimates most closely reflects the PrevailingMarket within 20 days after their appointment, then, within 10 days after theexpiration of such 20 day period, the two appraisers shall select a thirdappraiser meeting the aforementioned criteria. Once the third appraiser (i.e. arbitrator) has been selected as providedfor above, then, as soon thereafter as practicable but in any case within 14Business Days, the arbitrator shall make his determination of which of the twoEstimates most closely reflects the Prevailing Market rate and such Estimateshall be binding on both Landlord and Tenant as the Base Rent rate for thePremises.  If the arbitrator believesthat expert advice would materially assist him, he may retain one or morequalified persons to provide such expert advice.  The parties shall share equally in the costs of the arbitratorand of any experts retained by the arbitrator. Any fees of any appraiser, counsel or experts engaged directly byLandlord or Tenant, however, shall be borne by the party retaining suchappraiser, counsel or expert.

 

3.                                       Ifthe Prevailing Market rate has not been determined by the commencement date ofthe Renewal Term, Tenant shall pay Base Rent upon the terms and conditions ineffect during the last month of the initial Term for the Premises until suchtime as the Prevailing Market rate has been determined.  Upon such determination, the Base Rent forthe Premises shall be retroactively adjusted to the commencement of the RenewalTerm for the Premises.  If suchadjustment results in an underpayment of Base Rent by Tenant, Tenant shall payLandlord the amount of such underpayment within 30 days after the determinationthereof.  If such adjustment results inan overpayment of Base Rent by Tenant, Landlord shall credit such overpaymentagainst the next installment of Base Rent due under the Lease and, to theextent necessary, any subsequent installments, until the entire amount of suchoverpayment has been credited against Base Rent.

 

5.                                       RenewalAmendment.  If Tenant is entitled toand properly exercises its Renewal Option, Landlord shall prepare an amendment(the “Renewal Amendment”) to reflect changes in the Base Rent, Lease Term,Termination Date and other appropriate terms. The Renewal Amendment shall be sent to Tenant within a reasonable timeafter receipt of the Binding Notice (not to exceed 30 days) and Tenant shallexecute and return the Renewal Amendment to Landlord within 15 days afterTenant’s receipt of same, but, upon final determination of the PrevailingMarket rate applicable during the Renewal Term as described herein, anotherwise valid exercise of the Renewal Option shall be fully effective whetheror not the Renewal Amendment is executed.

 

6.                                       Definitionof Prevailing Market.  For purposesof this Renewal Option, “Prevailing Market” shall mean the arms length fair marketannual rental rate per rentable square foot under renewal leases and amendmentsfor reasonably comparable lengths of time entered into on or about the date onwhich the Prevailing Market is being determined hereunder for space comparableto the Premises in the Building with improvements comparable to those existingin the Premises on the date Tenant exercises the Renewal Option and thatreflect what a willing, comparable

 

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tenant would pay, and a willing, comparable landlord would accept.  The determination of Prevailing Market shalltake into account any material economic differences between the terms of thisLease and any comparison lease or amendment, such as rent abatements,construction costs and other concessions and the manner, if any, in which thelandlord under any such lease is reimbursed for operating expenses andtaxes.  The determination of PrevailingMarket shall also take into consideration any reasonably anticipated changes inthe Prevailing Market rate from the time such Prevailing Market rate is beingdetermined and the time such Prevailing Market rate will become effective underthis Lease.

 

C.                                     **After HoursHVAC.**  Paragraph 17 ofAttachment I to the Original Lease (which section was added to the OriginalLease pursuant to the Fourth Amendment) shall be deleted in its entirety andreplaced with the following:

 

Landlordagrees to provide after hours HVAC to Tenant upon request provided such requestis made by Tenant not later than 1:00 p.m. on a normal business day, not laterthan 1:00 p.m. on the day preceding a recognized holiday or not later than 1:00p.m. on Friday for additional service on a Saturday or Sunday.  To compensate Landlord for the cost ofproviding such after hours HVAC service, Tenant agrees to reimburse Landlord atthe rate of $30.00 per hour for such service, as such rate may be adjusted fromtime to time, but no more frequently than once every six months, to reflect anyactual increases to Landlord in providing such services.

 

D.                                    **Signage.**  So long as Tenant occupies the entire 7thfloor of the Building, Tenant shall have the right to (i) place and maintainduring the Term a sign on the 7th floor adjacent to the elevatorlobby, and (ii) continue during the Term Tenant’s existing signage on theexterior monument sign.  Nothing hereinins intended to be in lieu of or to replace any other signage rights granted toTenant under the Lease.

 

E.                                      **Right of First Offer.**

 

1.                                       Grantof Option; Conditions.  Tenant shallhave an on-going right of first offer (the “Right of First Offer”) with respectto any space contiguous to the Premises on the 6th floor of theBuilding, as more particularly shown on **Exhibit D** hereto (any portion of suchspace or collectively, the “Offering Space”). Tenant’s Right of First Offer shall be exercised as follows: at any timeafter Landlord has determined that the existing tenant in the Offering Spacewill not extend or renew the term of its lease for the Offering Space (butprior to leasing such Offering Space to a party other than the existingtenant), Landlord shall notify Tenant (the “Offer”) of the terms under whichLandlord is prepared to lease the Offering Space to Tenant for the remainder ofthe Lease Term, which terms shall reflect the Prevailing Market (hereinafterdefined) rate for such Offering Space as reasonably determined byLandlord.  Tenant may lease suchOffering Space in its entirety only, under such terms, by delivering writtennotice of exercise to Landlord (the “Notice of Exercise”) within 10 days afterTenant’s receipt of the Offer, except that Tenant shall have no such Right ofFirst Offer and Landlord need not provide Tenant with an Offer, if:

 

a.                                       Tenantis in default in any monetary obligations under the Lease beyond any applicablecure periods at the time that Landlord would otherwise deliver the Advice; or

 

b.                                      morethan 15% of the Premises is sublet (other than to an Affiliate, as defined inthe Original Lease) at the time Landlord would otherwise deliver the Advice; or

 

c.                                       theLease has been assigned (other than to an Affiliate, as defined in the OriginalLease) prior to the date Landlord would otherwise deliver the Advice; or

 

d.                                      Tenantis not occupying the Premises on the date Landlord would otherwise deliver theAdvice; or

 

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e.                                       theOffering Space is not intended for the exclusive use of Tenant during the LeaseTerm; or

 

f.                                         theexisting tenant in the Offering Space is interested in extending or renewingits lease for the Offering Space or entering into a new lease for such OfferingSpace.

 

2.                                       Termsfor Offering Space.

 

a.                                       Theterm for the Offering Space shall commence upon the commencement date stated inthe Offer and thereupon such Offering Space shall be considered a part of thePremises, provided that all of the terms stated in the Offer shall governTenant’s leasing of the Offering Space and only to the extent that they do notconflict with the Offer, the terms and conditions of this Lease shall apply tothe Offering Space.

 

b.                                      Tenantshall pay Base Rent and Additional Rent for the Offering Space in accordancewith the terms and conditions of the Offer, which terms and conditions shallreflect the Prevailing Market rate for the Offering Space as determined inLandlord’s reasonable judgment.

 

c.                                       TheOffering Space (including improvements and personalty, if any) shall beaccepted by Tenant in its condition and as-built configuration existing on theearlier of the date Tenant takes possession of the Offering Space or as of thedate the term for such Offering Space commences, unless the Offer specifies anywork to be performed by Landlord in the Offering Space, in which case Landlordshall perform such work in the Offering Space. If Landlord is delayed delivering possession of the Offering Space dueto the holdover or unlawful possession of such space by any party, Landlordshall use reasonable and diligent efforts to obtain possession of the space,and the commencement of the term for the Offering Space shall be postponeduntil the date Landlord delivers possession of the Offering Space to Tenantfree from occupancy by any party.

 

3.                                       Terminationof Right of First Offer.  The rightsof Tenant hereunder with respect to the Offering Space shall terminate on theearlier to occur of: (i) Tenant’s failure to exercise its Right of FirstOffer within the 10 day period provided in subsection 1 above; and(ii) the date Landlord would have provided Tenant an Advice if Tenant hadnot been in violation of one or more of the conditions set forth in subsection 1above.

 

4.                                       OfferingAmendment.  If Tenant exercises itsRight of First Offer, Landlord shall prepare an amendment (the “OfferingAmendment”) adding the Offering Space to the Premises on the terms set forth inthe Advice and reflecting the changes in the Base Rent, rentable square footageof the Premises, Tenant’s Allocable Share andother appropriate terms.  A copy of theOffering Amendment shall be sent to Tenant within a reasonable time afterLandlord’s receipt of the Notice of Exercise executed by Tenant, and Tenantshall execute and return the Offering Amendment to Landlord within 15 daysthereafter, but an otherwise valid exercise of the Right of First Offer shallbe fully effective whether or not the Offering Amendment is executed.

 

5.                                       Definitionof Prevailing Market.  For purposesof this Right of First Offer provision, “Prevailing Market” shall mean theannual rental rate per square foot for space comparable to the Offering Spacein the Building under leases and renewal and expansion amendments being enteredinto at or about the time that Prevailing Market is being determined, givingappropriate consideration to tenant concessions, brokerage commissions, tenantimprovement allowances, existing improvements in the space in

 

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question, and the method of allocating operating expenses andtaxes.  Notwithstanding the foregoing,space leased under any of the following circumstances shall not be consideredto be comparable for purposes hereof: (i) the lease term is for materiallyless than the lease term of the Offering Space, (ii) the space isencumbered by the option rights of another tenant, or (iii) the space hasa lack of windows and/or an awkward or unusual shape or configuration.  The foregoing is not intended to be anexclusive list of space that will not be considered to be comparable.

 

6.                                       Subordination.  Notwithstanding anything herein to thecontrary, Tenant’s Right of First Offer is subject and subordinate to theexpansion rights (whether such rights are designated as a right of first offer,right of first refusal, expansion option or otherwise) set forth in the leaseof any tenant of the Building existing on the date hereof.

 

VIII.**                         Miscellaneous.**

 

A.                                   This Amendment sets forth the entire agreementbetween the parties with respect to the matters set forth herein.  There have been no additional oral orwritten representations or agreements. Under no circumstances shall Tenant be entitled to any Rent abatement,improvement allowance, leasehold improvements, or other work to the Premises,or any similar economic incentives that may have been provided Tenant inconnection with entering into the Lease, unless specifically set forth in thisAmendment or the Lease.

 

B.                                     Except as herein modified or amended, theprovisions, conditions and terms of the Lease shall remain unchanged and infull force and effect.

 

C.                                     In the case of any inconsistency between theprovisions of the Lease and this Amendment, the provisions of this Amendmentshall govern and control.

 

D.                                    Submission of this Amendment by Landlord is notan offer to enter into this Amendment but rather is a solicitation for such anoffer by Tenant.  Landlord shall not bebound by this Amendment until Landlord has executed and delivered the same toTenant.

 

E.                                      The capitalized terms used in this Amendmentshall have the same definitions as set forth in the Lease to the extent thatsuch capitalized terms are defined therein and not redefined in this Amendment.

 

F.                                      Tenant hereby represents to Landlord that Tenanthas dealt with no broker in connection with this Amendment other than LeoBacker of Washington Partners (“Tenant’s Broker”).  Tenant agrees to indemnify and hold Landlord, its members,principals, beneficiaries, partners, officers, directors, employees,mortgagee(s) and agents, and the respective principals and members of any suchagents (collectively, the “Landlord Related Parties”) harmless from all claimsof any brokers other than Tenant’s Broker, claiming to have represented Tenantin connection with this Amendment. Landlord hereby represents to Tenant that Landlord has dealt with nobroker in connection with this Amendment other than Shawn Jackson of EquityOffice Properties Management Corp. (“Landlord’s Broker”).  Landlord agrees to pay all fees, commissionsand other amounts owed to Tenant’s broker in connection with this Amendment andshall indemnify and hold Tenant, its members, principals, beneficiaries,partners, officers, directors, employees, and agents, and the respectiveprincipals and members of any such agents (collectively, the “Tenant RelatedParties”) harmless from all claims of any brokers claiming to have representedLandlord in connection with this Amendment.

 

G.                                     Each signatory of this Amendment representshereby that he or she has the authority to execute and deliver the same onbehalf of the party hereto for which such signatory is acting.

 

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**IN WITNESS WHEREOF**, Landlord and Tenant have duly executed thisAmendment as of the day and year first above written.

 
|   |   | **LANDLORD:**                                                             |
|--------|--------|---------------------------------------------------------------------------|
|   |   |                                                                      |
|   |   | **WA-110 ATRIUM PLACE, L.L.C.,****a  Delaware limited liability company** |
|   |   |                                                                      |
|   |   | By:                                                                       | Equity Office  Management, L.L.C.,  a Delaware limited liability company,  its non-member manager |
|   |   |                                                                      |   |
|   |   |                                                                      | By: |   |   |
|   |   |                                                                      | M. Patrick Callahan |
|   |   |                                                                      | Senior Vice  President – |
|   |   |                                                                      | Seattle Region |
|   |   |                                                                      |
|   |   | **TENANT:**                                                               |
|   |   |                                                                      |
|   |   | **CLICK2LEARN, INC., a Delaware  corporation**                            |
|   |   |                                                                      |
|   |   | By:                                                                       |   |   |
|   |   |                                                                      |   |   |
|   |   | Name:                                                                     |   |   |
|   |   |                                                                      |   |   |
|   |   | Title:                                                                    |   |   |
|        |        |                                                                           |  |  |  |  |  |

 

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** **

**THIS PAGE IS REQUIRED IF PROPERTY IS IN DELAWARE,**

**MICHIGAN, OHIO, UTAH, WASHINGTON, D.C. OR WASHINGTON STATE**

 

#### **LANDLORDACKNOWLEDGMENTS**

 

STATE OF                           )

COUNTY OF                       )  ss:

 

I, the undersigned, aNotary Public, in and for the County and State aforesaid, do hereby certifythat M. Patrick Callahan, personally known to me to be the Vice President,Seattle Region, of Equity Office Management, L.L.C., a Delaware limitedliability company, and personally known to me to be the same person whose nameis subscribed to the foregoing instrument, appeared before me this day inperson and acknowledged that as such officer of said entity being authorized soto do, (s)he executed the foregoing instrument on behalf of said entity, bysubscribing the name of such entity by himself/herself as such officer, as afree and voluntary act, and as the free and voluntary act and deed of saidentity, for the uses and purposes therein set forth.

 

GIVEN under my hand and officialseal this          day of                      , 2003.

 
|   |          |
|--------|---------------|
|   | Notary Public |

 

My Commission Expires:

 

**TENANT ACKNOWLEDGMENTS**

 

STATE OF                           )

COUNTY OF                       )  ss:

 

On this the         day of                     ,2003, before me a Notary Public duly authorized in and for the said County inthe State aforesaid to take acknowledgments personally appeared                                                                known to me to be                               President of                                                                ,one of the parties described in the foregoing instrument, and acknowledged thatas such officer, being authorized so to do, (s)he executed the foregoinginstrument on behalf of said corporation by subscribing the name of suchcorporation by himself/herself as such officer and caused the corporate seal ofsaid corporation to be affixed thereto, as a free and voluntary act, and as thefree and voluntary act of said corporation, for the uses and purposes thereinset forth.

 

IN WITNESS WHEREOF, I hereuntoset my hand and official seal.

 
|   |          |
|--------|---------------|
|   | Notary Public |

 

My Commission Expires:

 

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**EXHIBITA**

** **

**LETTEROF CREDIT**

 
|                             |
|----------------------------------|
| [Name of Financial  Institution] |
|                             |   |
|                             | Irrevocable Standby |
|                             | Letter of Credit |
|                             | No. |   |   |
|                             | Issuance Date: |   |   |
|                             | Expiration Date: |   |   |
|                             | Applicant: | Click2Learn, Inc. |
|                                  |  |  |  |  |  |  |  |

 

Beneficiary

 

WA-110 Atrium Place,L.L.C.

411-108thAvenue NE, Suite 1980

Bellevue, WA  98004

 

Ladies/Gentlemen:

 

We herebyestablish our Irrevocable Standby Letter of Credit in your favor for theaccount of the above referenced Applicant in the amount of                                                                U.S. Dollars ($                          )available for payment at sight by your draft drawn on us when accompanied bythe following documents:

 

1.             An original copy of this Irrevocable Standby Letter ofCredit.

 

2.                                       Beneficiary’sdated statement purportedly signed by one of its officers reading: “This drawin the amount of                                           U.S. Dollars($                       )under your Irrevocable Standby Letter of Credit No.                                               represents funds due and owing to us as a result of the Applicant’s failure tocomply with one or more of the terms of that certain lease by and betweenWA-110 Atrium Place, L.L.C., as landlord, and Click2Learn, Inc., as tenant.”

 

It is a conditionof this Irrevocable Standby Letter of Credit that it will be consideredautomatically renewed for a one year period upon the expiration date set forthabove and upon each anniversary of such date, unless at least 60 days prior tosuch expiration date or applicable anniversary thereof, we notify you inwriting by certified mail, return receipt requested, that we elect not to so renewthis Irrevocable Standby Letter of Credit. A copy of any such notice shall also be sent to:  Equity Office Properties Trust, 2 NorthRiverside Plaza, Suite 2100, Chicago, Illinois 60606, Attention: TreasuryDepartment.  In addition to theforegoing, we understand and agree that you shall be entitled to draw upon thisIrrevocable Standby Letter of Credit in accordance with 1 and 2 above in theevent that we elect not to renew this Irrevocable Standby Letter of Credit and,in addition, you provide us with a dated statement purportedly signed by one ofBeneficiary’s officers stating that the Applicant has failed to provide youwith an acceptable substitute irrevocable standby letter of credit inaccordance with the terms of the above referenced lease.  We further acknowledge and agree that:  (a) upon receipt of the documentationrequired herein, we will honor your draws against this Irrevocable StandbyLetter of Credit without inquiry into the accuracy of Beneficiary’s signedstatement and regardless of whether Applicant disputes the content of suchstatement; (b) this Irrevocable Standby Letter of Credit shall permitpartial draws and, in the event you elect to draw upon less than the fullstated amount hereof, the stated amount of this Irrevocable Standby Letter ofCredit shall be automatically reduced by the amount of such partial draw; and(c) you shall be entitled to transfer your interest in this IrrevocableStandby Letter of Credit from time to time without our approval and withoutcharge.  In the event of a transfer, wereserve the right to require reasonable evidence of such transfer as acondition to any draw hereunder.

 

This IrrevocableStandby Letter of Credit is subject to the Uniform Customs and Practice forDocumentary Credits (1993 revision) ICC Publication No. 500.

 

We hereby engagewith you to honor drafts and documents drawn under and in compliance with theterms of this Irrevocable Standby Letter of Credit.

 

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All communicationsto us with respect to this Irrevocable Standby Letter of Credit must beaddressed to our office located at                                                                                                                     to the attention of                                                                       .

 
|   | Very truly yours, |   |
|--------|-------------------|--------|
|   |              |   |
|   |              |   |
|   |              |   |
|   | [name]            |   |
|   |              |   |
|   | [title}           |   |
|   |

** **

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**EXHIBIT B**

 

##### **WORKLETTER**

 

This Exhibit is attached to andmade a part of the Amendment by and between **WA-110 ATRIUM PLACE, L.L.C., a Delaware limited liability company** (“Landlord”), and **CLICK2LEARN, INC., a Delawarecorporation** (“Tenant”), for space in the Building located at 110-110thAvenue N.E., Bellevue, Washington.

 

As used in thisWorkletter, the “Premises” shall be deemed to the Premises, as defined in theattached Amendment.

 

1.                                       ThisWork Letter shall set forth the obligations of Landlord and Tenant with respectto the improvements to be performed in the Premises for Tenant’s use.  All improvements described in this WorkLetter to be constructed in and upon the Premises by Landlord are hereinafterreferred to as the “Landlord Work.” Landlord and Tenant shall each work diligently to complete Landlord’sWork by September 30, 2003, and Landlord shall use all reasonablediligence to obtain all of the permits required for Landlord’s Work as soon aspossible.  It is agreed thatconstruction of the Landlord Work is intended to be “turn-key” and will becompleted at Landlord’s sole cost and expense, using Building Standard methods,materials, and finishes, unless Landlord and Tenant mutually agree in writingto use other than Building Standard methods, materials and finishes.  Notwithstanding the foregoing, Landlord andTenant acknowledge that Plans (hereinafter defined) for the Landlord Work havenot yet been prepared and, therefore, Landlord and Tenant are unable todetermine the exact cost of the Landlord Work at this time.  Accordingly, Landlord and Tenant agree thatLandlord’s obligation to pay for the cost of Landlord Work (inclusive of thecost of preparing Plans [which cost shall be limited to $59,044.50 (i.e., $1.50per rentable square foot of the Premises) of the Maximum Amount], obtainingpermits, a construction management fee equal to 5% of the total constructioncosts, and other related costs) shall be limited to $629,808.00 (i.e., $16.00per rentable square foot of the Premises) (the “Maximum Amount”) and thatTenant shall be responsible for the cost of Landlord Work, plus any applicablestate sales or use tax, if any, to the extent that it exceeds the MaximumAmount.  Landlord shall enter into adirect, fixed-sum contract for the Landlord Work with a general contractorselected by Landlord, which general contractor shall use commerciallyreasonable cost control measures.  Inaddition, Landlord shall have the right to select and/or approve of anysubcontractors used in connection with the Landlord Work, all of whichsubcontractors (except for the mechanical subcontractor) shall be selected on acompetitive bid basis.  Landlord agreesto keep Tenant reasonably apprised of the status of the Landlord Work.

 

2.                                       Tenantshall be solely responsible for the timely preparation and submission toLandlord of the final architectural, electrical and mechanical constructiondrawings, plans and specifications (called “Plans”) necessary to construct theLandlord Work, which plans shall be subject to approval by Landlord andLandlord’s architect and engineers and shall comply with their reasonablerequirements to avoid aesthetic or other conflicts with the design and functionof the balance of the Building. Landlord shall provide all information reasonably required toefficiently and timely complete the Plans. Tenant shall be entitled, but not obligated, to retain Marvin Stein& Associates to prepare the Plans and represent Tenant with regard to allLandlord Work.  Tenant shall beresponsible for all elements of the design of Tenant’s plans (including,without limitation, compliance with law, functionality of design, thestructural integrity of the design, the configuration of the Premises and theplacement of Tenant’s furniture, appliances and equipment), and Landlord’sapproval of Tenant’s plans shall in no event relieve Tenant of theresponsibility for such design. Landlord shall, and shall cause its architect and engineers to respondpromptly to all requests and plan submittals related to the preparation of thePlans.  If requested by Tenant,Landlord’s architect will prepare the Plans necessary for such construction atTenant’s cost.  Landlord acknowledgesthat it has no objections to the improvements described generally in the spaceplans prepared by Marvin Stein & Associates and dated January 3, 2003;provided that Landlord’s final consent shall be subject to Landlord’s receiptof the final Plans and the other terms and conditions set forth in this WorkLetter.  Whether or not the layout andPlans are prepared with the help (in whole or in part) of Landlord’s architect,Tenant agrees to remain solely responsible for the timely preparation andsubmission of the Plans and for all elements of the design of such Plans andfor all costs related thereto.  Tenantwill deliver the final approved Plans to Landlord on or before March 15,2003**(the“Plans Due

 

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Date”), provided that Tenant promptly furnishescomplete information concerning its requirements to said architect andengineers as and when requested by them. Landlord and Tenant agree to devote such time as may be reasonablynecessary in consultation with the architect and engineers to enable them tocomplete and submit the Plans within the required time limit.  Time is of the essence in respect ofpreparation and submission of Plans by Tenant. (The word “architect” as used in this Exhibit shall include an interiordesigner or space planner.)  Landlordshall pay Tenant’s architect within 30 days of receiving a written invoice fromTenant or Tenant’s architect.

 

3.                                       IfLandlord’s estimate and/or the actual cost of the Landlord Work shall exceedthe Maximum Amount, Landlord, prior to commencing any construction of LandlordWork, shall submit to Tenant a written estimate setting forth the anticipatedcost of the Landlord Work, including but not limited to labor and materials,contractor’s fees and permit fees.  Within10 days thereafter, Tenant shall either notify Landlord in writing of itsapproval of the cost estimate, or specify its objections thereto and anydesired changes to the proposed Landlord Work. If Tenant notifies Landlord of such objections and desired changes,Tenant shall work with Landlord to reach a mutually acceptable alternative costestimate.

 

4.                                       IfLandlord’s estimate and/or the actual cost of construction shall exceed theMaximum Amount (such amounts exceeding the Maximum Amount being herein referredto as the “Excess Costs”), Tenant shall pay to Landlord such Excess Costs, plusany applicable state sales or use tax thereon, upon demand.  The statements of costs submitted toLandlord by Landlord’s contractors shall be conclusive for purposes ofdetermining the actual cost of the items described therein.  The amounts payable by Tenant hereunderconstitute Rent payable pursuant to the Lease, and the failure to timely paysame constitutes an event of default under the Lease.

 

5.                                       IfTenant shall request any material change, addition or alteration in any of thePlans after approval by Landlord, Landlord shall have such revisions to thedrawings prepared, and Tenant shall reimburse Landlord for the reasonable costthereof, plus any applicable state sales or use tax thereon, upon demand to theextent that the cost of performing such revisions cause the cost of LandlordWork to exceed the Maximum Amount. Promptly upon completion of the revisions and prior to undertaking anyrequested material change, addition or alteration, Landlord shall notify Tenantin writing of the estimated increased cost, if any, which will be chargeable toTenant by reason of such change, addition or deletion.  Tenant, within 1 Business Day, shall notifyLandlord in writing whether it desires to proceed with such change, addition ordeletion.  In the absence of suchwritten authorization, Landlord shall have the option to continue work on thePremises disregarding the requested change, addition or alteration, or Landlordmay elect to discontinue work on the Premises until it receives notice ofTenant’s decision, in which event Tenant shall be responsible for any TenantDelay in completion of the Premises resulting therefrom.  If such revisions result in a higherestimate of the cost of construction and/or higher actual construction costswhich exceed the Maximum Amount, such increased estimate or costs shall bedeemed Excess Costs pursuant to Paragraph 4 hereof and Tenant shall paysuch Excess Costs, plus any applicable state sales or use tax thereon, upondemand.

 

6.                                       Followingapproval of the Plans and the payment by Tenant of the required portion of theExcess Costs, if any, Landlord shall cause the Landlord Work to be constructedsubstantially in accordance with the approved Plans.  Landlord shall notify Tenant of substantial completion of theLandlord Work.

 

7.                                       Anyportion of the Maximum Amount or the Cabling Allowance (as defined in paragraph9 below) which exceeds the cost of the Landlord Work or is otherwise remainingafter June 30, 2003, shall accrue to the sole benefit of Landlord, itbeing agreed that Tenant shall not be entitled to any credit, offset, abatementor payment with respect thereto. Notwithstanding the foregoing, Tenant may apply the remaining CablingAllowance as a credit towards Base Rent accruing under the Lease on or afterJuly 1, 2003.  In addition,provided that at least 50% of the Maximum Amount was applied toward the cost ofthe Landlord Work, Tenant may apply the remaining Maximum Amount toward BaseRent accruing under the Lease during the months of January 2005, January 2006,and February 2006 only.  Any portion ofthe Maximum Amount remaining after February 2006 shall accrue to the solebenefit of Landlord and shall not be applicable to any Base Rent accruing underthe Lease after February 28, 2006. For example, if $100,000 of the

 

2

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Maximum Amount remained after June 30, 2003, Tenant could apply$66,425.06 of such remainder towards the Base Rent due for the periodJanuary 1, 2005, through January 31, 2005, and could apply theremaining $33,574.94 balance towards the Base Rent due for the periodJanuary 1, 2006, through January 31, 2006.

 

8.                                       Tenantacknowledges that some of the Landlord Work may be performed by Landlord in thePremises during Normal Business Hours subsequent to the Second Extension Date*.*  Landlord and Tenant agree to cooperate witheach other in order to enable the Landlord Work to be performed in a timelymanner and with as little inconvenience to the operation of Tenant’s businessas is reasonably possible, including without limitation making the TemporaryPremises available to Tenant as provided in Section I.B. of the attachedAmendment.  Notwithstanding anythingherein to the contrary, any delay in the completion of the Landlord Work orinconvenience suffered by Tenant during the performance of the Landlord Workshall not delay the Second Extension Date******nor shall it subject Landlord to any liability for anyloss or damage resulting therefrom or entitle Tenant to any credit, abatementor adjustment of Rent or other sums payable under the Lease.

 

9.                                       ProvidedTenant is not in default under the terms of the Lease and in addition to theMaximum Amount, Landlord agrees to pay Tenant the sum of $50,000.00 (the“Cabling Allowance”) to be used for the cost of installing cabling in thePremises.  If the cost of installingcabling exceeds the Cabling Allowance, Tenant shall pay any and all costs inexcess of the Cabling Allowance, plus any applicable state sales or use taxthereon.  The Cabling Allowance (or aportion thereof if the total cost of installing cable in the Premises does notequal or exceed the Cabling Allowance) shall be paid within twenty (20) days ofTenant providing written invoices or billing statements for the cost of suchinstallation and cabling.  Any portionof the Cabling Allowance remaining after June 30, 2003, shall be appliedpursuant to the terms of paragraph 7 above.

 

10.                                 Inaddition to that portion of the Landlord Work set forth in the Plans, Landlordshall also complete, at Landlord’s sole cost and expense in addition to theMaximum Amount, the following work in the elevator lobby of the Premises, usingBuilding standard methods, materials and finishes (the “Lobby Work”):

 

(a)                                  installfive (5) 2x4 light fixtures;

 

(b)                                 installtwo (2) light sconces;

 

(c)                                  removeexisting recessed lighting; and

 

(d)                                 installfour (4) new recessed can lights.

 

The Lobby Work shall be considered a part of LandlordWork under this Work Letter.

 

11.                                 ThisExhibit shall not be deemed applicable to any additional space added to thePremises at any time or from time to time, whether by any options under theLease or otherwise, or to any portion of the original Premises or any additionsto the Premises in the event of a renewal or extension of the Second ExtendedTerm, whether by any options under the Lease or otherwise, unless expressly soprovided in the Lease or any amendment or supplement to the Lease.

 

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**EXHIBIT C**

 

**PARKING**

 

This Exhibit is attached to andmade a part of the Amendment by and between **WA-110 ATRIUM PLACE, L.L.C., a Delaware limited liability company** (“Landlord”), and **CLICK2LEARN, INC., a Delawarecorporation** (“Tenant”), for space in the Building located at 110-110thAvenue N.E., Bellevue, Washington.

 

1.                                       Duringthe Lease Term, Landlord shall lease to Tenant, or cause the operator (the“Operator”) of the garage servicing the Building (the “Garage”) to lease toTenant, and Tenant shall have the right to lease from Landlord or such Operator,up to a maximum of 117 unreserved parking spaces (collectively, the “UnreservedSpaces”) and 1 reserved parking space (the “Reserved Space”) in the Garage(collectively, the “Spaces”) for the use of Tenant and its employees.  The Spaces shall be leased at the rate of$0.00 per Space, per month, from the period commencing as of January 1,2003, and ending December 31, 2003. Commencing as of January 1, 2004, through December 31, 2008,the Unreserved Spaces shall be leased at the rate of $50.00 per Space, permonth, plus applicable tax thereon, and the Reserved Spaces shall be leased atthe rate of $100.00 per Space, per month, plus applicable tax thereon.  Such rates may be adjusted from time-to-timeafter December 31, 2008, to reflect the then current rate for parking inthe Garage.  If requested by Landlord,Tenant shall execute and deliver to Landlord the standard parking agreementused by Landlord or the Operator (the “Parking Agreement”) in the Garage forsuch Spaces provided the same does not conflict with the Lease and isreasonable and customary.  Tenant shallhave the right to suspend its right to use any Spaces not needed and therebynot be obligated to pay any fees or charges for such Spaces.

 

2.                                       Nodeductions or allowances shall be made for days when Tenant or any of itsemployees does not utilize the parking facilities or for Tenant utilizing lessthan all of the Spaces.  Tenant shallhave the right to lease or otherwise use more than the number of reserved andunreserved Spaces set forth above at the rates set forth above if suchadditional Spaces are available in Landlord’s sole discretion.

 

3.                                       Exceptfor particular spaces and areas designated by Landlord or the Operator forreserved parking, including Tenant’s 1 Reserved Space (in its currentlocation), all parking in the Garage shall be on an unreserved, first-come,first-served basis.

 

4.                                       NeitherLandlord nor the Operator shall be responsible for money, jewelry, automobilesor other personal property lost in or stolen from the Garage regardless ofwhether such loss or theft occurs when the Garage or other areas therein arelocked or otherwise secured.  Except ascaused by the negligence or willful misconduct of Landlord and without limitingthe terms of the preceding sentence, Landlord shall not be liable for any loss,injury or damage to persons using the Garage or automobiles or other propertytherein, it being agreed that, to the fullest extent permitted by law, the useof the Spaces shall be at the sole risk of Tenant and its employees.

 

5.                                       Landlordor its Operator shall have the right from time to time to designate thelocation of the Spaces and to promulgate reasonable rules and regulationsregarding the Garage, the Spaces and the use thereof, including, but notlimited to, rules and regulations controlling the flow of traffic to and fromvarious parking areas, the angle and direction of parking and the like.  Tenant shall comply with and cause itsemployees to comply with all such rules and regulations, all reasonableadditions and amendments thereto, and the terms and provisions of the ParkingAgreement.

 

6.                                       Tenantshall not store or permit its employees to store any automobiles in the Garagewithout the prior written consent of Landlord. Except for emergency repairs, Tenant and its employees shall not performany work on any automobiles while located in the Garage or on theProperty.  If it is necessary for Tenantor its employees to leave an automobile in the Garage overnight, Tenant shall provideLandlord with prior notice thereof designating the license plate number andmodel of such automobile.

 

7.                                       Landlordor the Operator shall have the right to temporarily close the Garage or certainareas therein in order to perform necessary repairs, maintenance andimprovements to the Garage.

 

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8.                                       Tenantshall not assign or sublease any of the Spaces without the consent ofLandlord.  Landlord shall have the rightto terminate this Parking Agreement with respect to any Spaces that Tenantdesires to sublet or assign. The foregoing shall not pertain to any rightsgranted in connection with any assignment or sublease of the Premises.

 

9.                                       Landlordmay elect to provide parking cards or keys to control access to theGarage.  In such event, Landlord shallprovide Tenant with one card or key for each Space that Tenant is leasinghereunder, provided that Landlord shall have the right to require Tenant or itsemployees to place a deposit on such access cards or keys and to pay a fee forany lost or damaged cards or keys.

###### ** **

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###### **EXHIBIT D**

 

**OFFERING SPACE**

 

 

WCW\4382\060\1211647.07

 

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